Acquarelle Co’s Accounts Payable figure included a sum of Rs 60.2 million in respect of leaves which was wrongly computed, resulting in an overprovision of Rs 18.7 million. A sum of Rs 4.3 million due to a supplier which was included in the Accounts Payable where the accuracy of the figure could not be ascertained. Rs 16.6 million relating to Administrative Expenses was not included under accruals in the current financial year .Utilities bills amounting some Rs 4.5 million were wrongly accrued. The Statement of Cash Flow was not prepared in line with accounting standard: The figure of Rs 3.6 million relating to procurement of assets was not recorded. Increase in Inventories (Rs0.6 million), increase in Accounts Receivable (Rs 7.1 million) and decrease in Accounts Payable (Rs 18.5 million) were wrongly calculated. Movement in Short Term Deposits (Rs 4.5 million) was accounted for in both Working Capital Changes and Investing Activities.
Acquarelle Co’s Accounts Payable figure included a sum of Rs 60.2 million in respect of leaves which was wrongly computed, resulting in an overprovision of Rs 18.7 million. A sum of Rs 4.3 million due to a supplier which was included in the Accounts Payable where the accuracy of the figure could not be ascertained. Rs 16.6 million relating to Administrative Expenses was not included under accruals in the current financial year .Utilities bills amounting some Rs 4.5 million were wrongly accrued.
The Statement of
Briefly give your views on each of the above situations and state what type of auditor’s report should be issued and explain your choice. You should not reproduce the entire audit report. Only mention appropriate extracts which are relevant.
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